How To Get A Credit Card

March 31, 2019 by  
Filed under Credit card

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Are you preparing to apply for your first credit card? Perhaps you are overwhelmed by all the options available and want to make sure you get the best card to meet your needs and build excellent credit? There are many benefits to using a credit card, provided you wield it responsibly and select one with minimal fees and good rewards potential. If you are on the fence about getting a credit card, are unsure about where and when to get one, and want to learn how to get a credit card, this detailed guide is for you.

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Why Should You Get a Credit Card?

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Build Credit

One of the primary reasons that anyone considers how to get a credit card is to build credit. Building a credit history and improving your overall credit score is important for things like obtaining loans, renting an apartment, or buying a house. Credit cards are an essential tool for budgeting and purchases. Debit cards do not build credit or even show up on your credit score, so getting a credit card and using it responsibly is the only way to do so.

Enjoy Rewards

Another excellent reason to learn how to get a credit card is to enjoy the rewards and points you can earn along the way. Many credit card companies offer cards that allow you to earn points as you spend money. These points can translate to discounts for restaurant meals, hotels, gas purchases, airfares, clothing, etc.

Pay Securely

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Another benefit of learning how to get a credit card is you will have a secure payment option for your expenditures. If you only use a debit card, for example, you are more vulnerable to fraud as it withdraws the money from your account at once.

With a credit card, if someone makes a fraudulent purchase, you can notify your credit card company right away and deal with the situation immediately before the money goes out. You will not pay for the fraudulent purchase, and your credit card company will help you reach a solution whether it is putting your card on alert or issuing you a new one.

Expand Your Payment Options

Learning how to get a credit card allows you to expand your payment options. If you do not have the money to spend on something up front in cash, a credit card enables you to make a particular purchase without straining your bank account. Provided you use the card responsibly and pay your bill on time when it is due, credit cards can allow you to budget more effectively while still making the purchases you need to.

You cannot make certain purchases with a debit card, or cash or you will experience significant hurdles to do so. For example, if you want to book a few nights at a hotel or rent a car, a credit card will make this process far easier. If you want to travel abroad, you likely cannot use your debit card, so having a credit card is essential. Never spend more than you can pay and always pay your bill on time in full. That way, you can enjoy a wider range of payment options without getting into debt and damaging your credit score.

Where and When to Get a Credit Card

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Approval Requirements

If you want to build your credit history, you need to have a credit card to do so. The trick is, it can be difficult to get a credit card without having built a credit history in the first place. Sounds frustrating, right? Actually, there are offerings you can consider to make sure you get approved for the card that works for you, even if you are brand new to building your credit.

Regarding how to get a credit card, you must usually be no younger than 18 years of age to apply for one. If you are still under the age of 21 and want your own card, you will need to provide documentation showing proof of independent income or other financial assets to show credit card companies you can pay your bills.

If you cannot do so, becoming an authorized user on your parent’s or someone else’s account over 21 could be your best bet. If you have a part-time or full-time job, the income may be sufficient for you to be approved for your own student credit card or a secured credit card.

Start With A Student Credit Card

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If you are considering how to get a credit card for the first time, one of the best things you can do is start with a student credit card. If you have minimal or no credit history, you will probably not have a credit score at all because there has been no information being sent to credit bureaus to identify your loan and bill paying habits.

This makes a student credit card a good place to begin. You can find student credit cards issued by many major credit card companies, and they might be one of your only viable options when first starting out. Just watch for high annual fees and interest rates when applying for a student card and try to select one that will give you a chance to build your credit without straining your wallet.

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Become An Authorized User

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Another great option when you are first considering how to get a credit card is to become an authorized user on someone else’s account. Whether this is a parent or another adult over 21, becoming an authorized user is a good way to learn how to use a credit card responsibly while still having accountability to someone else for your expenditures. If you have a little credit history or have a history of bad credit, you can rebuild your credit as an authorized user, provided you make your payments on time.

Consider A Secure Credit Card

If you are not in a position to get a student credit card or become an authorized user on someone else’s account, the best option for anyone with no or minimal credit is to purchase a secured credit card. You can get a secured credit card with a set deposit amount, allowing you to build your credit with responsible usage. After building your credit over time with a secured card, you will have many more options available to you to be approved for a traditional credit card.

How to Get a Credit Card

Understand The Responsibility Involved

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Part of learning how to get a credit card is to understand the responsibility involved. Whether you apply for a student card, become an authorized user on your parent’s account, or choose a secured card, you need to be ready and able to pay any bills you incur in full and on time to build your credit.

Start small with expenditures and work your way up so you do not live beyond your means. Set up payment reminders and automatic withdrawals so you never miss a payment.

Do Your Research

Look at the terms and conditions for any credit card you consider and make sure your history is being reported to credit bureaus so you can build credit. Not all credit cards are created equal. Each card bears unique fees, benefits, rates, etc.

Choose a card with low interest rates and no annual fees. Do your research and make sure you select a card that will offer you rewards, a fair credit limit, and good payment policy.

Remember This

While many credit cards require users to have a credit history, there are a number of cards that will accept applications showing little to no credit. No matter what level of credit you have, always choose a card that applies to your history.

For instance, if you have built up credit by being an authorized user on a parent’s account, your chances of being approved for a card requiring moderate history are heightened. If you have little credit card history, skip applying for credit cards geared toward excellent credit, as your application will probably be denied.

Choose Wisely And Apply

Once you have decided what kind of card you will need to get, you need to survey your options, choose wisely, and apply. If you are still in college, your easiest bet is to apply for a student credit card from any major credit card company or become an authorized user on your parent’s account. You can also try applying for a credit card from your bank. If you have a checking or savings account with a history of responsible usage, this could be a good solution to build credit.

Another possible alternative for first-time users is retail credit cards. They do not offer many options outside of the store they are good for, but they will help you build credit and can give you sufficient history to apply for a traditional card later on.

Again, look at major credit card companies offering secured cards. You will need to pay a deposit to get one, but you can increase your chances of switching over to an unsecured one eventually while still building your credit. Make a list of credit card companies you are interested in, see what cards you might be eligible to apply for, read the terms and conditions carefully, and select the one that works best for you.

Conclusion

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When learning how to get a credit card, take the time to peruse the possibilities, and not just apply for the first credit card you happen to find. Credit card issuers offer many options that come with varying terms and conditions, so it is important to read the fine print and understand what selections are available to you.

How To Get A Business Loan

March 4, 2019 by  
Filed under Finance

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If you want to know how to get a business loan, you're already ahead of the game. Starting a business often requires capital with which to buy supplies, to produce what you need, and to find a building in which to house your business. Not many businesses are easy to start without some sort of capital from investors or with a business loan. How to get a business loan is something many aspiring entrepreneurs want to know when they decide to pursue their dreams.

Before you open a business, learn how to get a business loan. It's not as simple as walking into a bank and asking for a loan so you can start a business. It involves forming a business plan, coming up with the financial aspect of your needs, and talking to a lender about the potential success of your business.

If your business is not one that can make any money or that is not thought-out well enough to succeed, no bank will lend you anything. They need to know that you can pay them back with the income you generate with your business. If you're unable to do that, they're not giving you any money. With that said, here's what you need to know about how to get a business loan.

How a Business Loan Works

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Every business loan is different. There are small business loans, and there are larger business loans. There are loans for start-ups and loans specifically for purchasing a franchise. The loans available for potential business owners are numerous, and they all work their own way. However, there are a few rules that apply to all business loans in general.

You Create a Business Plan

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You cannot get a loan for your business without a business plan. This must be fully curated. It must be precise, and it must be something you've carefully considered. Every dollar must be accounted for; every situation must be prepared for. You must have business insurance; you must have liability insurance; you must have everything outlined, planned for, and considered in the financing. You may need to re-work this plan more than once to meet the requirements your lender has in place.

Understand the Terms

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You need to know what you are working with in terms of the loan you want.

  • Short-term loans
  • Term loans
  • Equipment financing
  • Invoice financing
  • SBA loans
  • Business lines of credit
  • Merchant cash advances
  • Small business loans

Each of these loans works differently. Small business loans are often given by smaller lenders such as local banks and even credit unions. They work with the person opening the business. They might offer a small loan of only $15,000 to help you finance minor equipment.

A short-term loan and some of the other loans on the market require you have a minimum credit score, a minimum amount of annual revenue already coming in, and an already established business. For example, a short-term loan requires that you've already in business for a minimum of two years, you have an annual revenue of more than $300,000, and you have a credit score of more than 650.

A term loan, on the other hand, only requires you to spend one year in business, have a minimum credit score of 550, and have a minimum of $50,000 in revenue. Equipment financing loans require you have at least 11 months in business under your belt, more than $100,000 in annual revenue, and a 600 credit score or higher. Every loan is different. Every loan has its own repayment terms.

How Does Each Loan Work?

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calculating how much money to loan

When learning how to get a business loan, you need to learn how the loan you need works. You have to present a business plan. You have to agree to the repayment terms. You have to decide how long you need to repay that loan, and you have to know that you are responsible for the repayment of this loan even if something happens to your business. You also need collateral which is often your business, your building, or your equipment.

Pros and Cons of a Business Loan 

Every choice you make in life has a long list of pros and cons, even when you're learning how to get a business loan. When it comes to business loans, there's more at risk than making the decision to have steak or chicken for dinner. Both have their pros and cons, but the idea of taking out tens of thousands of dollars for your business that you are required to pay back has a much more serious list of pros and cons.

The Pros of Business Loans

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One of the biggest pros of a business loan from a bank rather than looking for investors to provide you with capital is that you're not taking on any decision-making partners. An investor may use their money to buy into your business. This means they always get part of your profits unless you can afford to buy them out. Additionally, a bank will not ask for any of your profits or to make decisions in your business. They just want you to make a payment to them every month.

You can deduct your loan on your taxes. Business taxes are expensive, so this is a helpful situation you can consider when you are making the decision to apply for a business loan with which to fund your business. Another pro is that business loans are often equipped with much lower interest rates than usual, which makes it much easier for you to repay the loan terms.

Finally, a small business loan is not always a small sum of money. You can ask for whatever you need, and you have access to a great deal of money that can help you fund your business all at once. You can use this money right away, and it can help you build your own credit score as well as your business credit score. This is something you will need to learn more about as you begin a business and work on making it succeed.

The Cons of Business Loans

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Learning how to get a business loan involves learning what you're risking when you go this route. One of the biggest cons of a business loan involves knowing that there are strict rules you must follow. These rules are not always easy to deal with as a business owner, but you must follow them to get your loan. Additionally, you could be subject to changing rates depending on the loan you get and the type of business you have.

You will need to provide collateral for your loan, and many people see this as the biggest downfall to a business loan. Your stocks, your home, and even other assets you have might be at risk if your business fails. This is a terrifying aspect for some people, but it might also serve to work as your biggest motivating factor in creating a successful business.

How to Get a Business Loan

How to get a business loan is simple, but only when you know why you need one and how it works. Here are the steps you must follow if you need to get a business loan of your own.

Know Why You Need This Loan

man setting up financial plan for his business

You cannot go into a bank to get a business loan without a full business plan. You need to outline in great detail everything you need to pay for, how it will benefit your business, and how it will help you bring in more income. You need to know what you need money for, exactly how much everything costs,  exactly how much you will make, how you will make it, and why this will work.

Get Your Credit in Check

credit report is important for a business loan

You have to have a good credit score to get a loan. Take the time to make sure there are no mistakes on your credit report. if you need to raise your score a bit, spend a few months or a year working on that before you apply for a loan. You need the best possible rate to help you make the most of your loan.

Decide upon a Loan Type

man deciding what loan type to get for his business

Figure out which loan type works for you and your business. This is imperative because the loan you choose can either help make you or break you. Choosing the wrong loan type can hurt your business, but choosing the right one can help you flourish.

Find a Lender

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Do your homework on this one. Find out if you need to work with a major online lender, a big bank, a smaller bank, or even your local credit union. Compare rates and meet with the lenders. Talk to them to help them understand your vision. You have to make the right decision, and part of that is fostering a relationship with potential lenders.

Apply for a Loan

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If you are ready to apply for a loan, do it. You will then see what you get, what you need to do to make your loan better, and if it will work. You never know if you don't try, and this is the time to try. Do not sign on the dotted line, however, until you are sure you can agree to the terms and they work for you. Can you afford this loan?

Finalize Your Loan

three persons talking about finalizing their business loan

Gather your documents, do what you need to do as directed by your lender, and close on your loan. This is a business transaction, and it might just be one of the biggest deals you make in your life. Now is not the time to take this lightly. Make sure you can afford this loan.

Conclusion

Learning how to get a business loan is more than just learning how to get the finances you need. It's about learning how to make a business plan that works. It's about setting goals and learning to succeed. It's about so many things you don't consider before you apply for a loan. You cannot fail when you take out a business loan, so now is not the time to go into something you have not thought through with careful consideration.

How Long To Get Tax Refund

March 1, 2019 by  
Filed under Finance

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Filing taxes is difficult for many Americans and many dread the task. Even though taxpayers know that they need to remit their taxes annually to the Internal Revenue Service, it may difficult for them to know what is required to do so. The process can be confusing, as each taxpayer should file differently, making it hard for an individual to know what is required or applicable to them, specifically. Even after filing, many will want a ballpark estimate in weeks or months on how long to get tax refunds in the mail.

Although you might be excited to get tax refunds from your federal income tax return, you may still be disappointed with IRS processing times. The agency has many restrictions pertaining to how one should fill out the government's forms, which makes filing individual income more puzzling. The good thing is you can always ask for clarification from IRS on those rules.

This article highlights what the process of taxation involves by diving it into the following sections:

  • How income tax works
  • How to file your incomes tax return
  • How long to get tax refund

How Income Tax Works

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Each year, U.S. citizens are expected to report their annual incomes and pay their taxes accordingly. The federal government requires money to support its programs and build new infrastructure, and it obtains those funds from these taxes remitted annually. Taxpayers may find it difficult to navigate through and then comply with the IRS' elaborate, detailed and highly specific rules surrounding how to calculate taxes owed.

The money collected via taxes is used to fund the military, educational programs, welfare programs and a variety of agencies including the FDA and EPA. Businesses/individuals always pay a part of their profits/wages to the federal government yearly. Politicians, through well-laid-out legislative criteria, determine when and by how much of an increase taxes should be levied based on how much money is required to maintain governmental agencies and programs.

Legislators implement and construct tax laws while the IRS enforces these laws and is involved primarily in the collection of taxes. The IRS also is responsible for providing adequate information to taxpayers, particularly when they have questions that need to be answered or concerns that need to be addressed while they are attempting to calculate and file their taxes. If you find yourself stuck, then you can always talk to them and they will help you through the process. You also can access the help section of the IRS' website, which also offers you the convenience of filing online.

Income Tax Brackets and Tax Rates

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The IRS has designated tax rates and tax brackets for different taxpayers earning different amounts annually. A progressive system is currently in use in America, which means the higher your income, the higher the marginal rate at which your income will be taxed. However, the IRS has also put in place measures you can use in reducing your income tax liabilities, such as tax exclusions, deductions, breaks and credits.

Each taxpayer belongs to a specific tax bracket. The more you earn, the more tax you should pay since IRS uses a marginal tax bracket.

The “Pay-As-You-Go” system is what most people use. In this system, your tax is deducted from every paycheck sent by your employer to the IRS. This is known as withholding taxes. If you have overpaid your taxes through this system, then you are eligible for a tax refund. The IRS sends you back the amount you paid in excess of your required taxes in the form of a tax refund.

State Income Taxes

State and federal income taxes are different. The IRS is concerned primarily with federal income taxes. Some, but not all state governments also collect state income taxes, which are separate from the federal taxes reported to the IRS. State taxes are based on where you work or invest. They are administered on the state level by the state treasurer or the department of taxation on the state level.

How to File Your Income Tax Return

Income Tax Returns

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You are required to file various individual IRS income tax forms issued by the IRS and easily found on the IRS website. These forms allow for you to factor in your tax deductions and credits. Form 1040 and 1040 A are mainly for individual returns, while the 1040EZ form is for joint or single taxpayers who have no dependents. Form 1040NR is filed by nonresident aliens, while Form 1040NR-EZ is filed by nonresident aliens who don't have dependents.

Form 1040

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form 1040 of US individual income

Form 1040 is the standard form used by most Americans in reporting their income. Form 1040 allows taxpayers to claim numerous tax deductions essential for getting a tax refund. Commonly, it is called the “long form” as it is more far-reaching compared to the significantly shorter Forms 1040A and 1040EZ. Since Form 1040 is more extensive, it takes more time to complete, but it can be worth it because it can help you reduce your tax bill through deductions.

You can get your appropriate IRS form by simply downloading it onto your computer from the IRS website. You can also pick it up from a post office, a local library, a tax center or an IRS office.

The form is due by April 15 each year, although one can request an extension of about 6 months in order to file the return more accurately.

How to Fill Out Form 1040

You need to have the following information prior to filling Form 1040:

  • Your name or any other proof of identification
  • Wage statements
  • Your Social Security Numbers (SSN), and that of your wife or any other dependents
  • Filing and residency statuses
  • A copy of your past tax return
  • Information about you, your spouse's and dependents' birth dates 
  • Interest/dividends statements from banks, brokerages, etc.
  • Bank account information where any refund should be deposited
  • Proof of any tax deductions, tax credits or tax exclusions
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Line-By-Line Guide

Use the following steps to fill out the form:

  1. Fill the name, address, and ITIN or SSN
  2. Indicate your filing status — whether you're married or single or have dependents
  3. Fill out the tax exemptions
  4. Specify your income by reviewing your wage and taxation statements for an accurate determination of your annual income
  5. Specify your adjusted gross income
  6. Fill out the tax and credits or deductions
  7. Fill out information on other taxes (for example, self-employment tax)
  8. Specify tax payments
  9. Specify refunds
  10. Check the third-party designee only if you want another person to clarify the taxation information from the IRS
  11. Sign your return
  12. Assemble your return by gathering the appropriate documents

How Long to Get Tax Refund

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Mostly, getting your tax refund depends on how you fill out your return. The best way is to e-file, or electronically file, your return and to receive your refund via direct deposit. Some 90 percent of taxpayers who use this method receive their refunds within 21 days. This means that the amount refunded will be in your bank within three weeks from the day the IRS accepts your tax return, but may take additional days for the funds to be available to you.

If you use another method to file, for example a paper form, or you want to receive your refund as a paper check, then your refund may take longer as the processing time is longer. Filing paper returns and receiving your refund on a paper check will take the longest to process. It may take at least two months. If you are wondering how long to get tax refund, you might as well use the electronic method since it is the fastest.

The approximate schedules on how long to get tax refunds from the day you file to the day you receive the refund are as follows:

  • E-file, direct deposit: 1-2 weeks
  • Paper file, direct deposit: 3 weeks
  • E-file, check-in mail: 1 month
  • Paper file, check-in mail: 2 months

Checking Your Tax Refund Status

checking the status of your tax refund application online

If you have not received the refund within the stated time and you still wonder how long to get tax refund, then you might as well check the status of your federal tax refund. One way to do that is on the IRS website. Another way is by using the IRS2Go mobile application. Your tax return status will be available within a day if you file electronically. However, if you mailed a paper return, it may take up to four weeks for you to be able to get your status update. To check the tax return status, you'll need your SSN, amount of refund anticipated and filing status.

Conclusion

So, how long to get tax refund? It depends on how and when you file your tax returns. The best way of getting a refund quickly is by filing your returns electronically. This means you should e-file and also get the refund via a direct deposit to your bank account. Most of the people who use this method will get their refunds within three weeks. Sending a paper return and receiving the refund as a paper check will slow down the processing by months and, thus, it is not a viable way of getting your tax refunds.

You should also note that the IRS processes tax returns more slowly at the beginning and at the end of the tax season since there's a logjam then because most taxpayers file their returns then. We hope this article has adequately addressed how income tax works, how to file your incomes tax return, and how long to get tax refund.